The impact of foreign ownership on user satisfaction: Evidence from bus service market in Morocco

Abstract

This study examines whether the origin of ownership—foreign versus domestic—affects user satisfaction in Morocco’s delegated urban bus transport sector. While the public versus private ownership debate is extensive, the performance difference between foreign-owned and domestic-owned private operators remains an under-researched area in public service literature. Drawing on Multinational Enterprise (MNE) theory and Industrial Organization (IO) theory, the study argues that foreign-owned firms may possess firm-specific advantages that lead to superior service outcomes. Using survey data from 11,646 bus users across 14 Moroccan cities and employing a multilevel mixed-effects ordered logistic regression, the paper analyzes satisfaction across 13 service dimensions. The results provide robust evidence that foreign ownership is strongly and positively associated with higher user satisfaction across all measured dimensions, including comfort and convenience, bus cleanliness and maintenance, and overall service. The findings show that shifting from a domestic to a foreign operator decreases the probability of a user being "Very Dissatisfied and Dissatisfied" with the overall service by 43.7 percentage points while increasing the probability of being "Satisfied and very satisfied" by 40.7 percentage points. These findings support the hypothesis that foreign-owned operators benefit from transferable capabilities and strategic advantages, offering important insights for policymakers seeking to improve public service delivery through international partnerships.

Classification JEL: G32; D12

Paper type: Empirical Research